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Mérida, 2nd July 2013 (Venezuelanalysis.com) – Yesterday in Russia the Venezuelan government participated in the second summit of the Gas Exporting Countries Forum (GECF), and President Nicolas Maduro also held a private meeting with Russian president Vladimir Putin, signing five new cooperation agreements.

Venezuela is one of 11 member countries of the GECF, which held its second summit on Monday, Moscow time, in the Kremlin Palace. Established in 2001, the GECF is an intergovernmental organisation of some of the world’s leading natural gas producers. The other member countries are Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russia, and Trinidad and Tobago. The GECF’s member countries combined control over 70% of the world’s natural gas reserves, 38% of pipeline trade, and 85% of liquefied natural gas production.

At the summit, Maduro proposed the creation of a financial fund or a bank between the gas exporting countries. He argued that the proposal wasn’t just “about building a gas bank, but rather so that our public companies and the most powerful companies of our countries can join together to increase the investments in projects that each country is carrying out”.

He argued that one of the main aims of the summit should be joint work, including exchange of experiences and policies that favour better management of gas. For that, he proposed creating a research institute between the member countries.

Maduro announced that “in approximately one year” Venezuela could be “certified as [having] the fifth [largest] gas reserve in the world”.

In 2009 the Venezuelan government estimated that there are 200 million cubic feet of natural gas along the Venezuelan coastline. Natural gas is heavily subsidised in Venezuela, and while the government has been developing projects to introduce gas run cars, they have yet to be implemented on a mass scale.

The Moscow Declaration coming out of yesterday’s summit, titled “Natural Gas: The answer to the 21st century sustainable development challenges”, declared the forum’s “determination” to strengthen the GECF as a platform for advancing member countries’ position on international gas market issues.

The declaration also wants countries to enhance coordination to protect each other in all areas, including interactions with regulatory authorities of gas consuming countries. Member countries pledged to continue to support gas pricing based on oil products indexation, and to promote the expansion of natural gas utilisation in different forms, including motor fuel and feedstock.

At the first summit in November 2011, the GECF decided that natural gas prices were too low and recognised the “importance of long-term gas contracts to achieve a balanced risk sharing mechanism between producers and consumers”.

Bilateral meeting with Putin

While in Russia Maduro also met with Putin in order to ratify the continuity of their countries’ strategic alliances. The two countries currently cooperate in the areas of energy, defence, agriculture, housing and technology.

“Russia can count on the homeland of Simon Bolivar...we have come to ratify our desire to strengthen this strategic alliance and the close relationship of cooperation between both nations,” Maduro told press after the meeting.

Putin expressed similar sentiments and announced that an important street in Moscow will be named after the late Hugo Chavez “so that he remains in the Russian people's memory”.

The street was inaugurated today with a ceremony attended by Maduro and the head of Russia’s state owned company, Rosneft, Igor Sechin. It is located in the north east of Moscow, is 170 metres long, and surrounded by parks and a small square.

In further comments on the meeting with Putin, Maduro said, “We’ve held an extensive work meeting with President Putin... we want to continue to tighten the relationship between both countries... Russia and Venezuela are progressing in the energy, petroleum, and gas sectors, as well as with military cooperation and the development of a relationship in the financial, education, and cultural sectors”.

The two countries signed five new agreements, for a total of 240 ongoing agreements, which fall into 14 strategic areas. One new agreement involves creating a joint venture for natural gas production between Venezuela’s PDVSA and Rosneft. The two presidents also discussed opening up a direct flight between Moscow and Caracas, in order to facilitate tourism and trade.

“When we take on the presidency of Mercosur on 12 July, we want the relationship between Russia and the other countries of Mercosur to be strengthened, and ...we’d like to make Venezuela a strategic point between Russia and Latin America and the Caribbean,” Maduro also said.

According to Putin, Russian companies are currently investing US$20 billion in Venezuela.